A Successful Sports Label

Posted on March 16, 2013 by

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By Wendy Day (www.HelpfulAngel.com)

This first appeared in my column at AllHipHop.com in September 2009

Why is it that no one has built a successful record label owned by an athlete? I want to build the first successful independent record label owned by a sports figure!!! Now, I don’t mean an athlete who raps or sings….I mean an athlete who has business sense and wants to be in the music business. And it would be an added plus if he or she was looking to run the label after retiring from sports, but not mandatory.

When I first moved to Atlanta in 2006, I was interviewed for ESPN.com. I was asked why I thought no sports figure had ever succeeded in starting an urban record label even though so many had tried. I was shocked by the long list of athletes who’d tried and failed. Millions and millions of dollars had been wasted. Last month, that same journalist called me again. Although he has since moved on to Bloomberg TV from ESPN, three years had passed and he was following up to see if any athletes had come into the business and been successful. Not one has been successful. This bothered me immensely, and now I am on a mission to find an athlete with the right mindset to win big in this industry.

Still, to this day, there has not been a successful label owned by a sports figure. I’ve danced around a tiny bit over the past twenty years of my career with Dennis Scott, Nick Van Exel, Jamal Tinsley, T Mac, Quentin Groves, Amare Stoudemier, and even Roy Jones, Jr. I spoke briefly with Winky Wright a few years ago, who eventually chose Damon Dash to help his start his label—neither of them have labels now. I’ve spoken with sports agents who had no interest in their athletes owning record labels, so they sabotaged them to fail either in the negotiations or the initial stages of them starting labels (I won’t work with those who have disinterested or bullshit agents—it’s impossible to win, so I am proud to say I’ve never been part of the failed process). But I’ve yet to find the perfect athlete with the right mindset, the proper funding, and great music. And of course, the will to win in this industry.

I’ve watched sports guys hire industry people who aren’t qualified to help them start labels, either because they’ve never done it or because they run competing labels themselves. Some fall into both categories, sadly. I have seen hundreds of thousands of dollars wasted on false starts for artists and on elaborate parties, neither of which have anything to do with selling records. Building hype is a wonderful thing, but isn’t it better to build hype from the grind and the great music than for throwing parties? This is a b-u-s-i-n-e-s-s! I’ve watched MLB baseball players waste millions of dollars because they had the wrong staff in place. I’ve seen NBA super stars lose millions on the wrong artist and waste hundreds of thousands of dollars trusting the wrong consultants (please sue them!!) especially regarding radio spins. I’ve seen NFL players spend hundreds of thousands of dollars on elaborate parties to never even put out an artist or recoup any of the spending.

To put out a rap record successfully, it takes great music, artists who work hard, an experienced plan put together by someone with experience and connections and a successful track record in putting out music. It also takes proper funding—to put out a rap act in today’s economy, an investment of about half a million dollars per release is necessary…on the low end. I’ve done it for non-athletes with $300,000 but every penny of the income gets recycled back into the business to keep it running.

To break an act, you need excellent music…not just good music, but great music. It needs to start breaking at the street and club level and be worked in a regional area until radio is ready to embrace it. It then needs to be worked at radio by an experienced independent radio promoter who can take it to the next level. The artists need to get out on the road and stay on the road as long as possible going from town to town and city to city, working their record. The indie label needs great, legitimate distribution that has a hard working sales staff to get the record into stores and onto the internet for legal downloads– and successfully collect the money after the music sells from the stores and websites. I’m making it all sound easy and effortless but it’s not. It’s hard work, and takes experience, connections, favors, proper funding, relationships, and time.

As I analyze the sports labels that have come before, I have seen a large amount of mistakes. This advice applies to all labels, but especially to sports labels since the goal of MANY people who work in the music industry is to separate wealthy people from their money to get a paycheck. This attitude has always surprised me because it takes just as much work to make money by selling music as it takes to scam somebody. So why jack someone out of money when you can just do the work and be successful so that everybody wins?

I’ve noticed that most athletes needs to treat their record label like a serious business, not just a way to attract fame and attention. This is a serious business that can earn you money, if you treat it as such. I know it’s more glamorous than owning a dry cleaner or general contracting company, but it’s a business just the same. If your goal is to have parties and to be seen flossing in clubs, do that, but don’t start a record label to do that…start a party promotions or event company instead.

Have GREAT Music and Talented, Hard-Working Artists

The biggest mistake I see is in the quality of music. This is also the #1 reason that I turn down consulting work with labels—not just athletes, but everyone. This is a business first and foremost! Treat it as such. When you are running a real business, you choose the best artists with the most commercially viable music you can find. You don’t fund your son, your cousins, your niece, or your neighbors, unless they are worthy of that investment. Artists must have talent, charisma, song writing skills, and a work ethic that won’t quit. Do NOT listen to the artist or the people surrounding you for advice when determining if an artist has the right stuff or not. Listen to professionals (DJs, retail music store owners, fans, music bloggers, etc). If your neighbor can sing circles around Whitney Houston, that might be a good funding choice. A regional rap group that has found a way to press up their own CD and is already selling independently on the web and in their local area might also be a good choice for funding. But your wack ass nephew who can’t rhyme or make songs as well as Jay Z is NOT a great choice for backing, unless your goal is to write off the money you will spend as a loss. Of course, you’ll make your family happy by working with your nephew– until the project fails.

In terms of artist work ethic, that goes a very long way. Given a choice between a super lazy artist with supreme talent, and one with less talent but a get-up-and-go work ethic, I’ll take the one with work ethic any day. But they can’t be wack! They must have talent if you plan to sell music. On a scale of 1 to 10, the artists need to be a level 8, 9, or 10 in talent, as judged by others outside of your circle. On a work ethic scale, they need to be 9 or 10 as evidenced by their current work level. An artist sitting around waiting to be “discovered” is a bigger risk than an artist who is attending conventions and events, performing at the local talent shows, or even trying to get their music out there to the world via the internet or pressing CDs a few at a time and selling them.

Learn The Game Before Jumping In

The second biggest mistake I see in athletes coming into the music business is the lack of knowledge and research about the business. Just like you didn’t get into sports without learning the game and the other players, you shouldn’t come into the music world cold. Learn how the industry works and who the key players are. That doesn’t mean the key players won’t fuck you out of money, but it does mean that you’ll have an understanding of who is who. Once you know who’s who, you can start infiltrating and asking around about them. If many of the same people say the same things, it’s most likely accurate. If you want to build a successful company, seek guidance from those who’ve done it before. But if they already own their own labels, they may not be the best person to help you start yours. Do NOT be blinded by fame or hype—99% of what you see in this industry is not real.

When you hire someone to run your business for you, choose the best GM (General Manager) that you can find. Find someone who has run other labels successfully (preferably more than one) and who knows what they are doing. Google them, ask for references, and check their references. The best people can put you on the phone with their last 3 or 4 clients so you can ask questions.

This business isn’t a scientific business, meaning that we go on emotions and feelings a lot. If you aren’t a good judge of other people, DO have someone who is good at that help you out. Almost everyone who has complained about losing money was able to mention afterwards something about the person that made them wonder if he or she was shady. If you are thinking it, there’s probably a good reason for it. Do more research on them. And never, never, never hire your boy/cousin/friend/trusted sports advisor to run your label for you. This is a specialized business that requires connections, experience, knowledge that’s specific and hard to find, with favors from industry insiders in order to win.

Keep Your Fucking Mouth Shut

Because of those who’ve come before you and failed, it is NOT to your advantage to broadcast to the world that you are an athlete coming into the music business. The sharks and vultures who want to separate money from the wealthy will hone in on you like a sailor on shore leave looking for a scantily clad hooker. And the true professionals in the industry will immediately assume you’ll fail as all others have, and avoid working with you to avoid a failure on their resume. But here’s the kicker—no one will admit this to you, they will either just give you excuses of being too busy and bow out, or tell you what you want to hear while they take your money and not deliver (as history has shown time and time again). It is best to move around in silence until you’ve started to experience some success with your label and then announce to the world that it’s a label owned by an athlete. In this situation, silence is golden!

There is only one other way to do this where people already know you are a sports guy about to start a label….do it SUPER publicly. Secure a reality show and put a giant spotlight on you and your project. This will scare away the roaches and snakes (people who want to steal from you will want to do so cloaked in darkness, not with cameras rolling on national TV). The downside of this idea is that it will attract to you people who are more driven by fame rather than the true professionals who can help your label succeed. The trick is to find balance. You, as the owner of the label, need to step up in front of the camera and let those behind the scenes do their thing. No one wants to fail live in front of millions of viewers, which will scare away the scammers, but it may also scare away the key professionals you need, as well. Yep, balance is key!

My plan is to set up a label for a sports figure, but only to inform folks on a need to know basis. The distributor and artists will need to know where the funding is coming from, but the fans and consumers won’t need to know until the label is chugging along successfully. Let’s face facts, no one cared who owned Death Row, RocAFella, or Bad Boy until their artists were successful. If a reality show can help add positive benefit to the success of the artists, then we will figure out a way to do so effectively.

Do NOT Be The Artist

I can’t believe I even need to say this. If you are an athlete, do not try to sing or rap. Even if you have incredible talent, you will not be taken seriously. Rappers don’t try to professionally play ball (yeah, I saw Master P try), box, golf, or play tennis for the same credibility reasons. Rap is especially not an arena where gimmicks are accepted. We don’t embrace actors who rap (Drake may be the first to change this thinking), athletes who rap, or game show winners who rap—yes, I’m talking about “America Has Talent” and “American Idol.” These may all be fine for the mainstream masses, but it hasn’t translated into the rap marketplace yet. Thank God.

If You’re Going To Do This, Do It Right

This is a business, and like any business it takes proper funding to build your company. If you think this is an arena where you can come in with a small investment and win big, you are sadly mistaken. If you plan on investing less than $100,000 in a rap artist (the bar is even higher for a singer), save your money. You will absolutely end up dumping more money into your company later to save your initial investment, but you will do so after scaring away the true professionals who could have helped you if your budget was realistic in the beginning. Look at this logically, you will spend at least $50,000 to secure urban radio regionally (and this is a MINIMUM budget), then rhythmic radio is another $60,000 or so. Hopefully you have a pop record (sales are better, but you will spend about $100,000 at radio) Most singles take $50,000 to $100,000 to break regionally at radio. That’s just one single. A promo tour costs about $15,000 to $25,000 for a thirty day run. And thirty days on the road is not enough to support the release of an established artist, let alone break a new unknown artist. Add to these costs marketing, promotion, publicity, advertising, video costs, touring, internet promotions, street teams, etc.

If you are smart, you will end up paying a consultant or a great GM $50,000 to $150,000 to guide you in these treacherous shark infested waters, either monthly or in a single lump sum. A great consultant will end up saving you far more than you spend on him or her, but the point is that there is a cost associated with this. The bottom line is that if someone is offering you a great deal to start a label, or says they can do this with a minimal investment on your part, do more research. It is highly unlikely! It is as unlikely as you being able to purchase a brand new Bentley convertible, loaded, for $30,000. It just doesn’t happen….something isn’t right. If you want a Bentley, you will pay for a Bentley. But at least with a label, you’ll get a return on your investment. We hope.

Even if your goal is not to start a label, but to build an artist to the point where a major label will step in and offer you a deal, you still will need more than $100,000 in investment. As you do your research on this industry, you will find that putting out an artist regionally and selling CDs and downloads IS the best way to attract a larger deal from a major that will lead to success. Meanwhile, you still need to start with a realistic investment to properly fund your goals.

The bad business I have seen in this industry is heart breaking. I guess it shouldn’t surprise me that there has never been a successful athlete owned label, but it does. I’ve seen athletes higher party promoters to help them start their labels, spend upwards of $100,000 on parties, only to end up doing joint ventures with their artists at a bigger label—I wonder if they eventually realize they paid $100k to give up half of their artist? I’ve seen NBA All-Stars lose millions in promoting family members or themselves as rappers, only to sell less than 5,000 CDs and downloads. Even with a $500,000 budget, that’s a cost per CD of $100 to make a $6 to $8 return. Was it worth it?

This industry isn’t difficult. Selling music is fun and rewarding when you know what you are doing or guided by the right, legitimate people. Not everyone who separates you from your money means to jerk you—some just promise more than they can deliver. But at the end of the day, this is a business and we all need to treat it as such. My goal is to find an athlete who wants to win in this business, and until I find the right one, I’m going to keep searching. There’s got to be SOMEBODY who is serious, with great artists, and the will to win instead of to just seek fame.

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